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Credit Card Promotions

5 min read

That 0% balance transfer doesn't last forever. If you're not tracking when promotional rates expire and where your payments go, you risk a sudden jump in interest charges. Doughsense helps you stay ahead by tracking promotional segments, managing transfer offers, and showing exactly how your payments are allocated. This guide builds on the portfolio concepts in Managing Your Finances.

Understanding Promotional Rates

What are Promotional Rates?

Promotional rates are special interest rates applied to portions of your credit card debt for a limited time. Common examples include:

  • 0% APR on purchases - New purchases don't accrue interest for 12-18 months
  • 0% balance transfers - Transferred balances have no interest for 12-21 months
  • Reduced rate offers - Temporary lower rates like 2.9% for 6 months

Why Track Them Separately?

Credit cards apply different interest rates to different portions of your balance. By tracking promotional segments separately, Doughsense can:

  • Calculate accurate interest charges in projections
  • Show when each promotional rate expires, and project the switch to the standard rate
  • Show how each payment would be allocated across segments
  • Keep the transfer offers you track beside the card, ready to apply

Adding Promotional Segments

Step 1: Navigate to Your Credit Card

  1. Go to Net worth in the sidebar
  2. Find your credit card in the Liabilities section
  3. Click on the card to edit it

Step 2: Add Promotional Rates

  1. Expand the Promotional Rates section
  2. Click Add Promotional Balance
  3. Enter the following details:
    • Amount: The balance at this promotional rate
    • Rate: The promotional interest rate (e.g., 0% for 0% APR)
    • Expires: The date when the promotional rate ends
    • Description: Optional note (e.g., "Balance transfer from Visa")
  4. Click Save

Example: Setting Up a New Card

If you've just opened a card with a £3,000 balance transfer at 0% for 18 months:

  1. Total Balance: £3,000
  2. Add Promotional Segment:
    • Amount: £3,000
    • Rate: 0%
    • Expires: 18 months from today
    • Description: "Initial balance transfer"

The card will show:

  • Standard Balance: £0 (at regular APR)
  • Promotional Balance: £3,000 (at 0%)

Understanding Payment Allocation

How Payments are Applied

When you make a payment to a credit card with promotional segments, Doughsense follows industry-standard allocation rules:

  1. Standard balance first - Payments reduce the highest-rate balance first
  2. Promotional segments by expiry - Then applied to promotional balances expiring soonest
  3. Remaining promotional segments - Finally to other promotional balances

Example Payment Waterfall

Consider a card with:

  • £2,000 standard balance at 24% APR
  • £1,500 promotional balance expiring March (0%)
  • £1,000 promotional balance expiring June (0%)

A £2,500 payment would be applied:

  1. £2,000 to standard balance → £0 remaining
  2. £500 to March promotional → £1,000 remaining
  3. June promotional unchanged → £1,000 remaining

New balance: £2,000 (all at 0% APR)

Managing Balance Transfer Offers

Adding Transfer Offers

Track the balance transfer offers you receive, so you can apply one when you take it:

  1. Open your credit card in the Net worth section
  2. Go to its Over time page and find Offers
  3. Click Add a transfer offer
  4. Enter offer details:
    • Available Amount: Credit limit for transfers
    • Transfer Type: Balance Transfer or Money Transfer
    • Promotional Rate (%): The offer rate (usually 0%)
    • Promotional Period (months): How many months the rate lasts
    • Fee (%): Percentage fee (typically 2-3%)
    • Expiry Date (optional): When the offer expires

Transfer Types Explained

  • Balance Transfer: Direct transfer from another credit card
  • Money Transfer: Cash advance to your bank account (usually higher fees)

Watching Your Blended Rate

The Weighted APR Metric

The Weighted APR metric on Check-up shows the single blended rate your debt really costs: annualised interest divided by total balance, across every liability and its promotional segments. Because the projection knows each promotional expiry date, you can see the blended rate rise ahead of time as segments revert to standard rates.

Your Tracked Offers

Open a liability to see the transfer offers you have tracked, under Offers on its Over time page. Apply one and it becomes a promotional segment on that debt, at the offer's rate and for its window, and your projections carry it from there.

Staying on Top of Promotions

  1. Set calendar reminders 60 days before any promotional rate expires
  2. Check for new transfer offers each month
  3. Standard balances carry the highest rates, and the payment waterfall sends payments there first
  4. Allow 2-3 weeks for balance transfers to complete
  5. Count the fee: a 3% fee on a 0% offer is a cost up front, so weigh it against the interest the transfer saves

When a Transfer Changes the Projection

A balance transfer moves the numbers when:

  • A promotional rate expires in the next 30-60 days, so the balance is about to accrue at the standard rate
  • A transfer offer with available capacity exists to receive it
  • The transfer fee is less than the interest the balance would otherwise accrue
  • The balance would clear within the new promotional period, leaving no standard-rate tail

Projections with Promotional Rates

How Projections Work

Your financial projections accurately model promotional rates:

  1. Interest Calculations: Each segment accrues interest at its own rate (promotional segments typically 0%)
  2. Promotional Expiry: Automatically transitions expired segments to standard rate
  3. Payment Allocation: Follows the payment waterfall (standard first, then promotional by expiry)

What the Projection Carries

  • Promotional expiry: rates revert to standard on the recorded date, and the projected interest reflects it
  • Payoff: when each segment clears under the payment waterfall
  • Offer expiry: each tracked offer carries its expiry date, and an expired offer can no longer be applied

Troubleshooting

Common Issues

Promotional segments exceed total balance

  • Ensure promotional amounts sum to less than or equal to total balance
  • The difference becomes your standard balance

An offer shows no Apply

  • Check that the offer's expiry date hasn't passed: an expired offer can no longer be applied

Interest still showing on 0% balance

  • Confirm promotional segments are correctly entered
  • Check the expiry date hasn't passed
  • Verify total promotional amount doesn't exceed balance

Getting Help

If something doesn't look right, start by checking your promotional segment setup and verifying your transfer offer details match what your lender sent. For anything else, reach out to support through Send feedback, in the plan and account menu.

What's Next?

Try it in Doughsense

Put this guide into practice with your own finances.

Coming soon

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